The Morbi tile cluster — often described as the “Ceramic Capital of India” — has given rise to hundreds of manufacturers. But few have broken out nationally, fewer still have built a strong premium brand, and only a select handful have reached the public markets. Varmora Granito now wants to join that exclusive club.
The company has submitteed its IPO papers with the Securities and Exchange Board of India (SEBI), marking the first step towards its initial public offering. The IPO will combine a fresh equity issue of up to INR 400 crore with an OFS of 5.24 crore equity shares.
Varmora Granito IPO Details at a Glance
- Fresh Issue: Up to INR 400 crore
- Offer for Sale: Up to 5.24 crore shares
- Major exit by Katsura Investments (an affiliate of Carlyle Group) — up to 4.92 crore shares
- Smaller tranches by promoter family members
- Face Value: INR 2 per share
- Book Running Lead Managers: JM Financial, Goldman Sachs (India), SBI Capital Markets
- Registrar: KFin Technologies
Use of Proceed
The fresh issue proceeds will be channelled into:
- Debt repayment / pre-payment: INR 320 crore
- INR 280 crore for the company’s own borrowings
- INR 40 crore for loans of subsidiaries (Covertek Ceramica, Varmora Sanitarywares, Simola Tiles)
- General corporate purposes: Remaining amount to be determined post pricing
With net debt of INR 390 crore as of 31 March 2025, deleveraging will be a key immediate benefit.
Business Snapshot
Founded in 2003, Varmora has positioned itself at the high end of India’s tile industry, focusing on glazed vitrified tiles (GVT) — the premium category that offers higher realization (15–30% above ceramic or polished vitrified tiles) and better margins.
Market Leadership
- Fastest revenue CAGR among listed peers with tiles as the primary segment (FY23–FY25, Technopak Report)
- Multiple industry firsts:
- First to launch digitally printed wall tiles (2010)
- First in Asia to commercialize Integrated Stone Technology (IST) (2024)
- Early mover in large-format slabs, double charge tiles, high gloss and rocker surfaces
Product Mix (FY25 Revenue Share)
- GVT: INR 1,005.8 crore (69.56%)
- PVT: INR 156.0 crore (10.79%)
- Ceramic: INR 116.0 crore (8.03%)
- Bathware: INR 128.8 crore (8.90%)
- Adhesives & Others: INR 39.3 crore (2.72%)
The high GVT contribution has steadily lifted gross margin from 37.48% in FY23 to 38.95% in FY25.
Distribution Footprint: The EBO Engine
Varmora has built a diversified, de-risked distribution network:
- Domestic B2C: 286 Exclusive Brand Outlets (EBOs) & 2,000+ Multi-Brand Outlets (MBOs) in 949 cities
- FY25: B2C accounted for 68.82% of domestic sales
- MBO-to-EBO conversions: 121 outlets converted between FY23–FY25
- EBOs deliver higher revenue per outlet (INR 94.9 lakh vs INR 57.8 lakh for MBOs in FY25)
- Larger, more immersive EBO formats (avg size up from 1,747 sq ft in FY23 to 2,614 sq ft in FY25)
- B2B: 31.18% of domestic sales in FY25
- Builders like Signature Global, Sobha, Srijan Group
- Government empanelments for bulk, steady orders
- Exports: 20.87% of FY25 revenue, to over 100 countries
Manufacturing Capacity & Expansion
- Nine manufacturing units in Morbi, Gujarat — 78.55% of FY25 revenue from in-house production
- Added most manufacturing capacity among listed peers (2016–2025)
- IST Technology via SACMI partnership — marble-like vitrified tiles with lower environmental footprint
- New Tezpur, Assam facility (via 51% Allemby Ceramics acquisition) to tap East & Northeast India
- Capacity: 6.4 million sqm
- Strategic proximity to raw materials & regional markets
- Supported by state & central incentive schemes (UNNATI 2024, IIPPA 2019)
Financial Performance
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue from Operations | 1,334.95 | 1,435.48 | 1,446.03 |
| PAT | 55.06 | 44.94 | 30.77 |
| EBITDA Margin | 12.91% | 10.21% | 13.28% |
| ROCE | 13.29% | 7.95% | 6.32% |
Key takeaways:
- Revenue growth slowed to 0.73% in FY25 amid broader demand moderation.
- Margins recovered post-FY24 dip, helped by GVT mix and cost control.
- Rising leverage makes IPO’s debt reduction plan strategically critical.
Shareholding Pre-Offer
- Katsura Investments (Carlyle): 36.57%
- Promoters & family: Majority of remaining stake
- Top 13 shareholders hold ~99.95% of equity
Industry Context
- Indian domestic tile market grew from INR 36,000 crore in FY19 to INR 53,100 crore in FY25; projected INR 76,900 crore by FY29 (CAGR 9.7%)
- GVT’s share of industry revenue to rise from 35.5% in FY25 to 45% by FY29
- Organised segment share to climb from 57% in FY25 to 66% by FY29
Risks
- High concentration in GVT segment
- Competitive pressure from Morbi cluster players and imports
- Execution risks in East/Northeast expansion
- FY25 growth slowdown despite capacity and distribution investments
Final Words
Varmora’s DRHP reads like the blueprint of a company intent on cementing its status as India’s premium tile powerhouse. The brand’s stronghold in GVT, innovation-led differentiation, and distribution expansion into Tier-II/III cities and underpenetrated eastern markets are compelling.
Yet, the financials reveal a dual reality: the opportunity in premiumisation and organised sector growth is large, but execution discipline — particularly debt reduction, sustaining margins, and stimulating topline growth — will determine whether the IPO delivers lasting shareholder value.
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